Hudson’s Bay Company (HBC) says it will open two Saks Fifth Avenue stores in Toronto in the next couple years, one downtown at the flagship Hudson’s Bay store and one full-line store in Toronto’s Sherway Gardens. The company also announced plans to sell its downtown Toronto property to a commercial real estate firm and lease it from them on a 25-year contract.
“The opening of our first Saks Fifth Avenue stores at Toronto Eaton Centre and Sherway Gardens brings Canadian shoppers the full array of luxury fashion collections and exceptional service for which Saks is renowned,” commented HBC CEO Richard Baker in a statement. “We especially appreciate Cadillac Fairview’s strong commitment to the Queen Street location and adjacent Toronto Eaton Centre, providing us with the opportunity to be a major part of Toronto’s premier luxury shopping destination.”
The downtown Saks Fifth Avenue store will occupy 150,000 sq. ft. on multiple levels, co-located with the current Hudson’s Bay store at Queen Street and Yonge Street. It is scheduled to open for spring 2015.
The new lease for the Sherway Gardens Saks Fifth Avenue store is part of a larger deal with real estate firm Cadillac Fairview Corporation Limited. HBC will sell its downtown Toronto flagship retail complex and the adjacent Simpson’s Tower housing its corporate headquarters for $650 million. HBC says it will use the proceeds to pay down debt and make investments in expansion projects. The deal should close by late February.
“This sale-leaseback provides HBC with resources to deleverage and accelerate investment in our growth initiatives,” explained Baker. “We continue to explore other options to create additional value through the power and potential of our real estate assets.”
HBC acquired Saks Inc. in July last year for $2.9 billion.